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The Shipping Arms Race



Global shipping is in flux, with Europe staring recession in the face and China's stratospheric growth of years gone by now slowing markedly. Even before the current slowdown, ships that were sailing from China to Europe filled to the brim would return with plenty of empty space. Yet Danish shipping giant A.P. Moeller-Maersk, based in Copenhagen, is bucking the trend and went ahead with an order for 20 Triple-E container ships from South Korea's Daewoo Shipyard, the second biggest in the world. At $ 190 million a pop, the ships aren't exactly cheap but in maritime shipping, size still very much matters, more so than ever before. A number of factors, including the relatively high price of oil until recently, make only the very biggest companies with vast capacity viable. The Triple-E, currently the world's largest container ship, is where Maersk sees its future.
The growth of container ships, the backbone of many globalised industries, has been breathtaking. While the largest container ship in the 1990s would have carried around 5,000 steel containers, each just over 6 metres long, the Triple-E can bear over 18,000 containers, piled 20 high. Along with the many smaller categories of container ship, the Triple-Es transport around 70% of all global freight worth almost $ 13 trillion. The largest category of ships is not suitable for the majority of ports and too wide to fit through the Panama Canal yet a dozen or so ports from Europe to China can accommodate these floating giants as they make their journey of four to five weeks at a steady 16 to 18 knots.

The Panama Canal's limited capacity sits uncomfortably with China's growing trade relations with South America and global trade ambitions. In early 2014 the Nicaraguan government announced that it had given the go-ahead for a new canal, slicing through the central American jungle, which is to be paid for by a Chinese billionaire and will be wide enough to allow Triple-Es and similar ships to pass through. Though projects like these have been proposed before it is a mark of the worldwide reach of China's trade and seemingly unlimited capital available for infrastructure projects that it has come this far with the Nicaraguan project.

Maersk's uniquely productive relationship with China is not a purely one-way affair. The Danish company employs some 20,000 people in the People's Republic and operates container terminals in seven Chinese ports. It has also purchased 118 Chinese made ships worth around $ 3.5 billion and owns two Chinese factories that build the actual containers. Never one to be left behind, China's own China Shipping Container Lines has just ordered five ships that will top even the Triple-E's huge capacity with a maximum of 19,000 units, 1,000 more than Maersk's largest ship.



Andrew Testa accompanied the crew of the Mary Maersk, one of the company's Triple-Es, from Gothenburg in Sweden via Bremerhaven in Germany to Rotterdam, Europe's largest port.
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